Home Refinance Declined because of a $200 Credit Default - any chance of removing it?

Hi
Just as the title implies, our refinance has been declined bu St George because of a $200 Vodafone"3" bill default from three years ago. I rang the collections agency that the debt has been sold to and they advised that the best they can do is mark it as "settled in full" and lodge the investigation to see if the default procedure has been settled correctly if I wish to have the default removed altogether. If the procedures were followed, then the default cannot be removed.

My broker said that in order for the loan to be approved, the default has to be removed, not just marked as “settled in full”.

You'd probably be best off changing lenders to one that will be okay with a small telco paid default. There's a few out there that will - ME bank is a non-specialist who will do it, AMP and maybe CBA off the top of my head?

Thank you - the LVR is 80% luckily
My broker also advised if approaching them to remove the default won't work (in very rare cases it can), then pay the debt and he will need to submit an explanation letter to the lender, hoping they will accept

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